I began analyzing the financial markets in 1982 when I became the research director for a financial advisory firm and provided regular market analysis on stocks, commodities, currencies and mutual funds. I am a technical analyst. Much of my focus was on how obscure technical indicators or methods, could be applied to the financial markets and used as an effective trading tool. Many of the indicators I have used for years, such as Gerry Appell's MACD and Welles Wilder's RSI, have subsequently gained wide popularity.

This page is devoted to sharing my insights and techniques in order to help you become a smarter trader/investor. Over the past twenty years I have traveled around the world several times, visiting all of the major financial centers as he taught professional traders and money managers my approach to the financial markets.

My method of stock selection starts with a proprietary scanning method to select a group of individual stocks for more extensive analysis. This includes an in-depth study of the volume patterns that I use to determine the strength of a stock's trend. Those with the strongest trend, either up or down, are then further analyzed to determine entry, exit and risk levels. I use Fibonacci retracement, projection and extension analysis to determine both profit objectives as well as stops.

The Most Powerful Pivot Level

By the middle of February, the SPY was back above the quarterly pivot. Just a month later, the quarterly R1 at $115.66 was overcome and the high that month was $118.17.

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The SPY opened the 2nd quarter of 2010 at $117.80, which was above the new quarter’s pivot at $113.41. By the end of April, SPY made a high at $122.12 (point 9) that was just below the quarterly R1 at $122.25. The flash crash on May 6 took the SPY back below the quarterly pivot and the S1 at $108.16 was also exceeded. The 2nd quarter low was $107.15 but this was still well above the quarterly S2 at $99.32, point 10.

Of course, the same methodology works on any market, and next, I would like to take a brief look at crude oil from the last quarter of 2011 through the 2nd quarter of 2012.

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Crude oil opened the 4th quarter of 2011 at $78.92, which was below the quarterly pivot of $86.15, so going into the quarter, based on the pivot analysis, the trend was negative. On October 15, crude oil closed above the quarterly pivot (point 1). As I had discussed on October 11 Has Crude Oil Finally Bottomed?, the OBV had broken its downtrend, line a, and the same week crude oil closed above it’s quarterly pivot (point 1).

With crude above its quarterly pivot the focus was on the quarterly R1 at $96.60, which was exceeded in the middle of November as the high was $103.37. This was well below the R2 at $111.06. The pullback in the latter part of December took crude oil back to $93.31 (point 2), but it held above the monthly S1 pivot support at $91.99.

Crude oil opened 2012 at $99.70 solidly above the 1st quarter pivot at $92.38. Crude oil prices drifted lower in January, but bottomed in early February at $95.44. This was just below the monthly S1 at $95.87. On February 23, the monthly R1 at $109.81 was tested, and four days later, was exceeded as the high was $110.55, point 3.

Crude oil opened the 2nd quarter of 2012 at $103.27, but violated the quarterly pivot at $103.00 during the first trading day of the new quarter. For the next several weeks, crude traded above and below the quarterly pivot. Crude surged to a high of $106.43 on May 2, point 4, but then reversed to close the week sharply lower.

The weekly OBV had been deteriorating since late March as it had broken its uptrend, line b. As crude oil was peaking in early May, the OBV just rallied back to its now declining WMA, which was a sign of weakness.

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I plan to start regularly providing the quarterly pivot data in my daily stock column so I wanted to look at Apple Inc. (AAPL), which despite its recent slide is still a barometer of the tech sector.

I would like to focus on late 2011 when AAPL was in a trading range that was contained for the most part between quarterly R1 at $418.44 and the S1 at $348.60. As 2012 started AAPL opened at $409.40, which was well above the quarterly pivot at $395.31.

The stock market and APPL rallied sharply and with the mid-February high of $526.29, it had exceeded both the R1 and R2 quarterly resistance levels. The 2nd quarter open at $601.83 was above the quarterly pivot at $546.55.

However, by the middle of May, this level was broken (point 2) as APPL had a low of $522.18. The following week, AAPL closed back above the quarterly pivot level, suggesting that the intermediate-term uptrend was still intact.

On July 2, 2012 APPL opened the new quarter at $584.73 (point 3), which was just barely above the quarterly pivot at $583.39. This pivot was violated for three days late in the month in reaction to their earnings report.

APPL opened the following week back above the quarterly pivot, and in three weeks, exceeded the R1 resistance at $644.60. Just five weeks later AAPL had a high of $705.07, which was extremely close to the R2 at $705.21. At the end of August, I had come up with a target in the $709 to $722 area, using starc band and Fibonacci analysis.

By the start of the 3rd quarter, AAPL was already declining as it opened at $671.16 and shortly thereafter dropped below the quarterly pivot at $647.00. Right before the election, the S1 quarterly support at $590.07 was also broken as APPL made a low in mid-November at $505.75. This was just slightly below the S1 support at $513.04.

Using the close at $532.15, the quarterly pivot for the 1st quarter of 2013 is at $580.99. This number will change before the quarter is over, but for now is a level to watch.

With so many years of using pivot points, John Person has developed his own unique brand of pivot point analysis. By using his own proprietary methods to analyze the state of the market he comes up with his predicted levels of pivot support and resistance.

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If the state of the market is analyzed to be strong, then the predicted resistance may be the R2 instead of the R1.The chart of the Spyder Trust (SPY) covers the period from early 2006 through early 2008.

The SPY spent most of the 2nd quarter of 2006 below the quarterly pivot (blue) and began the 3rd quarter also below the pivot line. For that quarter, the software predicted that the S1 at $122.12 was the most likely area of support (green line).

The low in the middle of July was $122.39, and by early August, the quarterly pivot line at $127.44 had been overcome. The predicted resistance for the quarter (in red) was the R2 at $137.87. The price action was strong in the 2nd quarter as SPY closed near its highs.

The 4th quarter opening was well above the pivot at $129.33 and the predicted resistance level was at $141.33, which was the R2 level while the R1 was at $137.45. The predicted resistance was overcome at the end of the 4th quarter as the high was $143.24.

The SPY continued to make higher highs throughout the first two quarters and peaked at $156 in July, which was just below the R1 at $156.25. Those of you who remember this period will recall that the selling was quite heavy as the quarterly pivot was violated before the end of the month.

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